MTECHTIPS;-U.S. natural gas rallies towards 2-year high on cold

MTECHTIPS;-U.S. natural gas rallies towards 2-year high on cold weather outlook

MTECHTIPS- U.S. natural gas futures were higher on Tuesday, rallying towards a two-year peak amid colder forecasts for January. Natural gas for February delivery on the New York Mercantile Exchange rose by as much as 2.6% to a session high of $3.775 per million British thermal units, a level not seen since December 9, when prices touched $3.776, the most since December 2014. It was last at $3.740 by 9:15 AM ET (14:15 GMT), up 6.2 cents, or 1.7%. The natural gas market was closed on Monday due to the Christmas holiday. Futures rallied after updated weather forecasting models predicted that portions of the West and northern U.S. will be hit with rain, snow and slightly cool temperatures over the next few days. Looking ahead, Artic air is expected into the West and then spreading south and east in the first week of January, boosting demand expectations for the heating fuel. Natural gas prices typically rise during the winter as colder weather sparks indoor-heating demand. About half of U.S. homes use natural gas for heating. Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 220 and 233 billion cubic feet in the week ended December 23. If correct, that would be the biggest draw for the week since at least 1994. That compares with a withdrawal of 209 billion cubic feet in the preceding week, 58 billion a year earlier and a five-year average drop of 80 billion cubic feet